Revulytics Blog

Can big software vendors audit their way through the downturn?

April 30, 2009

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Matt Asay has an interesting post on CNET's The Open Road ("The business and politics of open source") - he notes (my emphasis added) that:

"Software piracy is emphatically wrong, but you have to wonder why
these big software vendors have to resort to wringing cash from their
existing customers rather than selling value to new customers.
But
maybe I struggle to understand such behavior when open-source software vendors are thriving in the economic downturn.

Software audits are a nasty way to engage with customers. Perhaps
those customers would do better to try open-source software next time."

I agree that there are many wonderful open source applications out there that do represent a nice alternative to their commercial counterparts. But if a company has made a business decision to use specific commercial applications - to design, simulate, build or test their new products, for example - shouldn't they comply with the license terms they agreed to when making the purchase?

Of course, software vendors do need to focus on their customer relationships, too. There are many ways to conduct software audits that don't damage the relationship between vendors and existing customers.

More interesting however, is the situation that many vendors face - auditing organizations that have never been paying customers. This is a different scenario than "existing customers" who have paid the vendor to license the software. To paraphrase Matt, these vendors have sold value to new customers - they just haven't been paid for that value.

Automatic software auditing like CodeArmor Intelligence enable vendors to identify these "unlicensed customers" and gather evidence on the extent of the usage.

With this information, the vendor can decide how best to deal with the organization. It can, of course, use SIIA, BSA or other legal channels to recover revenue - but it can also use its sales team or channel partners to build on the relationship that already exists: the company has already bought the value of the vendor's application, now it just needs to pay for it.

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Michael Goff

Post written by Michael Goff

Marketing Director at Revulytics
Michael is Marketing Director at Revulytics where he is responsible for corporate marketing, content, and social media. He has helped to educate the industry on the benefits of software usage analytics for compliance and product management through the company's blog and contributed articles in trade publications. Michael was previously a marketing programs manager at The MathWorks and principal at Goff Communications. Michael earned a J.D. from Boston University School of Law and a B.A. from Colgate University.